Men on average pay £95 more than women for car insurance.
Photograph: Monkey Business Images/REX

Car insurance prices in the UK have recorded their first year-on-year fall since 2014, following reforms to whiplash payouts and a review of compensation paid to victims of motor accidents.

According to comparison site Confused.com, the average premium in the first three months of 2018 was £768, down by 2%, or £13, on the same period last year. It said prices peaked in the last quarter of 2017 but have since fallen 7%.

The average figure for car insurance masks huge differences according to the type of driver. The average male driver aged 17 to 20 pays £2,348 on average, compared with £1,699 paid by women of the same age. The cheapest average insurance is paid by female drivers between 61 and 65, at £363.

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Gender differences – men on average pay £95 more than women – persist despite an EU directive forbidding insurers to assess drivers on their sex. Insurers say this is because men drive more expensive cars with larger engines, and tend to have significantly more motoring convictions than women.

Confused.com attributed the fall in premiums to a mixture of whiplash reforms and the so-called “Ogden rate”. “Insurers seem to have softened prices as the government announces a review of the Ogden rate discount, expected in April 2019, which could mean insurers pay out less when a claim is made. The government has also announced a reform to the way whiplash claims are calculated and paid, which may have also had an impact,” it said.

The Ogden rate is a formula used to calculate compensation for accidents, and a new rate proposed by the government last year sparked outrage among insurers and threats of huge premium increases. In September last year, the government backtracked after the insurers said the new formula would overcompensate crash victims.

Confused.com said the biggest fall in premiums since their peak were for 17-year-olds, but older drivers’ premiums had still risen.

In Scotland, premiums are also still increasing, with motorists in the Scottish Borders area suffering the largest increase (6%) since last year. Motorists in inner London have seen the biggest fall, down 6%, although they still pay the highest premiums at more than £1,000 a year on average.